By Josh Davis, Associate Editor

(Dec. 21, 2017) Ocean Pines officials plan to have a new multi-year bulkhead repair schedule in place by next year, according to General Manager John Bailey.

The association will not, however, suspend bulkhead collections because of recent inactivity.

Bailey responded to a homeowner complaint by Richard Nieman, sent on Dec. 12 and forwarded to several media outlets.

Nieman said one newspaper article suggested Bailey would not accept his recommendation to suspend property assessments for bulkhead repairs for one year.

Scheduled repairs were halted under a previous administration and have not yet been reinstated, leading to multiple homeowner complaints. Owners of lots with bulkheads pay a higher assessment rate in order to collect for bulkhead repairs.

In the letter, Nieman said he worked in budget and finance fields for more than three decades and “knows that it is conservative to budget in excess of your needs.”

He said he understood Bailey, hired only recently, in September, needed some time to get up to speed.

“However, it is super conservative when the Ocean Pines Association continues to ‘bankroll’ bulkhead reserves in excess of the money needed for next year’s budget,” Nieman said. “I certainly hope that you are not developing a budget that will spend in excess of $3 million on bulkhead replacement next year.

“As outlandish as this may seem, even an outlandish proposal for next year could be funded out of the next year’s [bulkhead] reserve estimated to be about $3.4 million by May 1, 2018. Based on previous years’ requirements, on the average, only $800,000 per year was spent. Unless you are proposing a program to replace the bulkhead in only five or 10 years in lieu of 20 or 30 years, I cannot conceive a need for the coming budget year’s bulkhead assessment.”

Nieman said the program was supposed to be “pay as you go.”

“I hope you can shed some light on your rationale for needing additional funds,” he wrote. “I also hope you will reconsider your decision and support a one-year suspension of the bulkhead assessment for all property owners.

“I hope your desire to retain the excess reserves and increase them will not continue until a program and its related costs can be developed,” Nieman continued. “I applaud your desire to get this program into full swing by the start of the budget year, but historically, a program with this complexity, will probably not be executed as quickly as you hope.”

Bailey, in a statement emailed to the Gazette last Wednesday, said he recognized the point Nieman was trying to make “and could even agree with him if the OPA were to continue to function without a multi-year bulkhead replacement program in place.”

“However, I do not believe that is going to the case, as by the new fiscal year we expect to have a new bulkhead replacement contract in place and a multi-year plan to go with it,” Bailey said.

“Furthermore, let’s do the math looking at the annual bulkhead contributions to the reserve. For every lot, $19 of the $921 assessment goes for maintenance of common area bulkheads. The waterfront lots (with some development exceptions) pay an additional $465 per lot per year as a contribution to the Bulkhead Replacement Reserve.

“If the 1,370 waterfront lots have an average of 72 linear feet of bulkhead each, and the average cost of replacement is, let’s say $220 per linear foot (not including landscape repairs and other side-costs), then with an annual bulkhead replacement contribution of $465, that lot owner would have to pay into the bulkhead reserve for 34 years to have fully paid for even a one-time replacement of their respective bulkhead. In other words, a lot owner is getting quite a deal on the replacement cost of their bulkhead, even with an annual bulkhead replacement reserve assessment of $465.”

Bailey added he planned to respond directly to Nieman.